Chatham House: Russia purchased Armenia

Russia’s influence in the South Caucasus and Central Asia is in decline but it keeps pushing against the tide, Chatham House says in its report “The Long Goodbye: Waning Russian Influence in the South Caucasus and Central Asia.”

“The South Caucasus, with its potential interstate conflict, presents a complex arena for Russian soft power. The levers of Russian influence here vary. They are economic and military in Armenia, scarcely present in Azerbaijan, and essentially related to negative publicity as well as economics with regard to Georgia,” the reports says, adding that Russian influence in Armenia is so great that lack of sovereignty should be Armenia’s number one concern. The governments in Azerbaijan and especially Georgia, where there is less Russian soft power at work, have more traditional security concerns about Russia. Armenia does not share these concerns (at least

openly).

Concerning Russia’s influence on Armenia’s energy market, the report says: “In 2003, the CEO of United Energy Systems (UES), Anatoliy Chubais, outlined plans to integrate the South Caucasus into a Russia- led energy-supply network through ten former Soviet republics, as well as plans to ensure electricity outflows from Armenia to Turkey and Azerbaijan. Chubais denied that UES sought political gains but he has been a leading proponent of the concept of a Eurasian ‘liberal empire’ and his actions gave Russia almost total control of Armenia’s energy market. It was Robert Kocharian, Armenia’s president from 1998 to 2008, who effectively sold off Armenia to Chubais and other Russian commercial and political interests. Through Gazprom’s ownership of its Armenian subsidiary, ArmRosGazprom, 80% of Armenia’s energy structure is Russian-controlled, including the majority of the Iran–Armenia gas pipeline, thus ensuring that Armenia cannot become an independent transit country should Iranian gas ever reach European markets.

Russia has also bought up all but two of Armenia’s hydroelectric and nuclear power stations, in exchange for writing off Armenian debt.”

Regarding the Nagorno-Karabakh conflict, the reports says: “Russia’s support of Armenia in the Nagorno-Karabakh dispute has been based on several interests: limiting Turkish influence, countering a Russophobic Azerbaijan in the early years of independence, and long-standing cultural ties reflected in the large Armenian diaspora in Russia. Russia’s positioning has given it a powerful lever of influence over Armenia and Azerbaijan, as well as external parties.

However, its backing of Armenia’s stance has changed in recent years: during his presidency, Medvedev invested more effort in mediation than his predecessors and the Azerbaijani first family has strong interests in Russia. But there are forces deriving financial profit and political leverage from continued tension and the status quo.

Russia sees its mediation over Nagorno-Karabakh in terms of its influence and may not be genuinely interested in a resolution. This is shown by Russian objections to an international peacekeeping force and to changes in the make-up of the Minsk Group, which has been mediating on the conflict since 1992. Russia has proposed deploying its own troops instead. This would strengthen its position, but seems unlikely to be accepted by Azerbaijan. It is an open question whether Russia would support Armenia militarily should Azerbaijan decide to retake the territory by force.”